Welcome to the SEMI Quarterly Report to Members:Documentation of SEMI accomplishments for Q4 of 2011 (October through December)

Thank You for a Strong Year,

Stan Myers turned over the SEMI leadership reins to me on November 15, and I am happy to report that he left us with a strong association. SEMI finances and membership continue to rebound from the industry crisis of 2008 and our member satisfaction ratings have never been higher. SEMI services and activities in all our business units continue to grow and we are well positioned for a solid year in 2012 despite some poor economic forecasts.

SEMI reported to our Board of Directors that membership grew over 7% to 1,940 members in 2011, primarily due to strong member retention rates and continued growth in PV and emerging markets. While final audited financial results will be reported at our annual Membership Breakfast at SEMICON West, I can now report that strong performance of our exhibitions helped SEMI revenues increase to over $53 million, up approximately 15% over 2010. We were able to add over $1.7 million to our association reserves to assure stable services in the event of another deep industry decline or unexpected cancellation of an exhibition. SEMI member satisfaction reached new highs this year as 93% of SEMI members rated our performance as "Acceptable" or "Above Acceptable."

SEMI's growth in PV and emerging markets continued to advance in 2011. Currently, approximately 19% of the association's revenues are derived from expositions, dues and programs serving solar and emerging markets, especially LED (for additional information see the Business Unit reports). SEMI Standards had an outstanding year with key milestones achieved in PV, 3D-IC and 450mm standards, and new standards committees were established in LEDs and in China. Government relations and industry advocacy programs, particularly related to the Japan earthquake and nuclear power crisis, helped support member interests throughout the world.

Looking forward, SEMI financial performance should be good for the next six months as early booking of booths at the SEMICON shows in Korea, China and West are all strong. I am confident that SEMI staff and SEMI services will continue to respond to member needs with efficiency and effectiveness. Thank you for your continued input, guidance and support and let's look forward to another successful year of industry growth and progress.

In October, the SEMI Foundation delivered three-day SEMI High Tech U (HTU) programs at KLA-Tencor in Milpitas and San Jose State University. Students (ages 14-17) attended from six Bay Area high schools. Other companies that sponsored the programs: Advantest, Applied Materials, Fremont Bank, and Hauman Technologies.

In Phoenix, General Dynamics signed up for a three-year agreement with the SEMI Foundation. Selected Coronado High School students can now look forward to two more years of HTU programs at General Dynamics.

In November, the fifth SEMI HTU in Carinthia was hosted by Infineon Technologies Austria AG and the University of Applied Sciences (Fachhochschule) Kärnten. Local secondary school students were introduced to careers in high tech.

In 2011, HTU had a measurable, positive impact on students, their parents and teachers. Through 15 programs held in Oregon, Washington, New York, California, Korea, Austria and France, we have reached over 4,000 students worldwide since the Foundation was established.

The final quarter of 2011 saw significant SEMI activity on issues, information and events important to members' semiconductor-related business.

Technology and trade and go hand-in-hand. When trading barriers are reduced and IP security is enhanced, the industry wins. Therefore, we were pleased to see the successful conclusion to the U.S.-Korea Free Trade Agreement, an issue that SEMI has championed in concert with other like-minded trade groups. We are also proud of sustained and elevated dialog promoting intellectual property protections for SEMI members. In the prior quarter, we conducted important briefings with the Intellectual Property Attaches from several countries to better convey critical issues for IP protection.

With the announcement of the new 450mm consortium, supply chain interests in the 450mm wafer transition have also become a key SEMI priority. We continue to promote a transparent planning process and have served member needs for information, efficiency and training with several activities in the recent quarter. Five new 450mm SEMI Standards were published in the period-- reflecting a productive interaction of customers and suppliers on wafer and interface specs that are essential to facilitate efficient early-stage R&D efforts. Additionally, 450mm was one of the key subjects at the SEMI International Trade Partners Conference (ITPC) in November. The elite executive forum hosted informative panel discussions, company presentations and a report from the newly-formed Albany NY-based consortium. SEMI also featured 450mm workshops and information sessions in conjunction with the regional SEMICON events.

SEMICON exhibitions serve as valuable platforms for industry dialog and member company engagement. The final two expositions of the year occurred in Europe and Japan. With the industry recovering from the Tohoku earthquake and tsunami, SEMICON Japan fell slightly short of booth and attendance levels of the prior year, but still achieved high levels of exhibitor and attendee participation. SEMICON Europa attracted over 5,000 attendees with an increase in number of exhibiting companies.

SEMI had strong attendance and valuable participation at SEMI Member Days in China and Taiwan. Along with our SEMICON events, these Member Days are vital opportunities to gauge member priorities and coordinate regional activities in these important regions.

For the year, the Semiconductor Business Unit grew revenues and membership and achieved the highest Member Satisfaction ratings in the seven years.

Quarter 4 (Oct-Dec 2011) Semiconductor Accomplishments

SEMICON Japan 2011SEMICON Japan 2011 was held December 7-9 with total verified attendance at 31,423. Over 830 companies exhibited using 2,192 booths. The SEMI Technology Symposium (STS) featured test, packaging, TSV, MEMS, lithography, and DFM presentations and discussions. Technical and business sessions included Used Equipment, SEMI Standards and EHS seminars and meetings. In addition, over 2,000 attendees attended the Exhibitors Sessions which featured presentations from the Secondary Equipment area, "Power of Asia" and "Next Generation Technology" Pavilions, and new Product and Technology exhibitors.

SEMICON Europa 2011SEMICON Europa 2011
SEMICON Europa 2011 was held October 11-13 in Dresden, Germany. With 5,500+ visitors and exhibitors in attendance and over 350 exhibitors (an increase of 7% from 2010), the event had an international audience representing 47 countries. SEMICON Europa 2011 included the most co-located events ever with: the 13th European Manufacturing Test Conference, the Advanced Packaging Conference, the International MEMS/MST Industry Forum, and the Plastics Electronics Conference and Exhibition (PE2011). SEMICON Europa also hosted the 15th European Fab Manager's Forum, covering improving manufacturing productivity and extending the life of existing fabs through new technologies and markets. Dr. Tibor Pavelka, CEO of Semilab Co. Ltd., received the European SEMI Award 2011 during the Executive Summit event.

International Trade Partners Conference 2011At the 26th International Trade Partners Conference (ITPC) 2011, held November 6-9 in Hawaii, industry leaders from all over the globe convened to discuss and collaborate on global manufacturing, technology and trade issues for the semiconductor and adjacent industries. With about 150 attendees, the conference featured speakers from NVIDIA, GLOBALFOUNDRIES, IBM, and Samsung, plus three executive panels: Industry Demand Drivers, Supply Chain Crisis Management, and Technology Challenges and Opportunities. During ITPC, a CEO Summit on 450mm was held where SEMI members discussed government funding, consortia engagement, standards progress and other issues related to industry 450mm strategy.

Known Good Die (KGD) Conference The 18th Annual International KGD (Known Good Die) Packaging and Test Workshop 2011 on November 10 took place in Santa Clara, Calif. The workshop was presented by MEPTEC in association with SEMI, focusing on semiconductor die products test, assembly, manufacturing, and business issues in the microelectronics industry.

International Standards Update for Semiconductors

Semiconductor Safety Standards Tutorial in Korea: On Oct 12-13, SEMI and the Korea Semiconductor Industry Association held a tutorial on semiconductor safety that attracted about 40 people.

450 Workshop at SEMICON Japan: A SEMI Standards Technical Education Program (STEP) on 450mm wafers was held on December 9 in Makuhari, in conjunction with SEMICON Japan 2011. This program aimed to give clear and detailed explanations about 450mm Standards and the latest developments in 450mm activities. It drew more than 80 participants.

Seismic Workshop at SEMICON Japan: A Standards EHS workshop called "Seismic Protection and SEMI Safety Guidelines" was held on December 7 in conjunction with SEMICON Japan 2011 drawing 70 participants. In this program, the usefulness of existing SEMI Safety Guidelines was reviewed, and lessons learned from the Great East Japan Earthquake were discussed.

SEMI Taiwan Members Day 2011SEMI Taiwan Members Day was held successfully in Hsinchu on December 22 with about 300 members attending the forum and cocktail reception. The event featured speakers from TSMC, MediaTek, SPIL, Gintech, Win-win Precision, Epistar and PowerChip.

SEMI Shanghai Member Day and GM Gathering SEMI Shanghai Member Day and GM Gathering was held on October 12 with nearly 200 members from the semiconductor, photovoltaic and flat panel display industries. Almost 80 executives from member companies attended the GM Gathering in the evening.

Public Policy Updates for Semiconductors

SEMI Briefs IP Attaches from Embassies around the World: On December 16, SEMI met with a group of U.S. Patent and Trademark Office representatives who serve as attaches in China, India, and several other countries. SEMI provided an overview of the industry and the intellectual property (IP) priorities of our member companies. SEMI was joined by the U.S. Semiconductor Industry Association for a discussion about potential policy responses to deal with the challenge of counterfeit semiconductors. In addition, the SEMI Taiwan office recently met with the Director General of the Taiwan IP Property Office to discuss industry issues.

U.S. and Korea Finalize Free Trade Agreement: In late 2011, the U.S. and South Korea approved the pending free trade agreement between these countries. Given the importance of this trading relationship, SEMI strongly supported this agreement and worked with the High Tech Trade Coalition to urge lawmakers to approve it. The agreement includes tariff elimination, customs facilitation, enhanced intellectual property protections and other measures designed to expand trade. It is expected to generate about $10-11 billion in economic benefits and create 250,000 jobs.

EHS Update for Semiconductor Business

EHS Regulatory Seminar: At SEMICON Japan/PV Japan, an EHS regulatory seminar, "Environmental Regulatory Trend and Case Study," was held on December 6 in Tokyo. More than 50 participants attended.

Sustainability Seminar at SEMICON Japan: "Approach for Energy and Green House Gas (GHG) Issues," a sustainability seminar, was held on December 8 in Makuhari at SEMICON Japan. More than 50 participants attended.

Feedback to European Commission: The SEMI Restriction of Hazardous Substances (RoHS) Working Group provided feedback, including substantial technical comments, to the European Commission on proposed new definitions affecting the RoHS Directive.

SEMI Industry Research and Statistics

Book-to-Bill: September 2011: US$ 926.5 million in orders; book-to-bill ratio of 0.71 (final); October 2011: $926.8 million in orders; book-to-bill ratio of 0.74 (final); November 2011: $977.2 million in orders; book-to-bill ratio of 0.83 (final); December: $1.16 billion in orders; book-to-bill ratio of 0.88 (prelim).

Semiconductor Equipment Sales: In December, SEMI projected that worldwide sales of new semiconductor manufacturing equipment will reach US$ 41.8 billion in 2011, according to the year-end edition of the SEMI Capital Equipment Forecast. Following a 151% market increase in 2010, the equipment market will expand by 4.7% in 2011, decline about 10.8% in 2012, but resume growth in 2013.

Semiconductor Packaging Materials Market: The market for semiconductor packaging materials, including thermal interface materials, is expected to reach $22.8 billion in 2011 and grow to $25.7 billion by 2015, according to a study by SEMI and TechSearch International. Laminate substrates remain the largest segment of the market, worth an estimated $9.7 billion globally in 2011.

Worldwide Semiconductor Equipment Billings: Worldwide semiconductor manufacturing equipment billings reached $10.6 billion in the third quarter of 2011. The billings figure is 11% percent lower than Q2 2011 and 5% lower than the same quarter a year ago. The data is gathered jointly with the SEAJ from over 100 global equipment companies that provide data on a monthly basis.

Our members in PV Group continued to go at full speed towards the end of a very busy year. The fourth quarter included three major expositions and conferences— PV Taiwan in October (in partnership with TAITRA), SOLARCON India in November, and PV Japan in December (in partnership with JPEA). These regional events provided a fantastic opportunity to bring local manufacturing supply chain stakeholders together with international customers and colleagues, and they shed light on many important issues that drive global PV strategies in 2012.

In Q3, I reported on an increasingly robust PV Standards effort in China. In December, the International Standards Committee (ISC) approved the formation of a formal China PV Standards Committee, effectively clearing the last hurdle for Chinese cell and module manufacturers and suppliers to become part of SEMI's International Standards Program. This is an important milestone as our Standards development efforts are global and truly benefit collaboration among stakeholders in all key markets. These collective efforts have now produced 27 SEMI PV Standards, a direct contribution to lowering manufacturing cost and staying competitive.

Global competitiveness will be a challenge as we look to 2012. After aggressive capacity expansions followed by a stark drop in demand, global installations are projected to slow to about 25% growth in 2011 (compared to 160% in 2010), leaving in its wake a huge overcapacity and low utilization rates that will stay with us for a while. The ongoing trade dispute between the U.S. and China further clouds the usually sunny outlook for PV.

Our priority at SEMI PV Group is to help you, our members, succeed in these trying times, and I would like to say "thank you" to the many SEMI members who participate in and contribute to our collective efforts in our PV Advisory Committees, Standards task forces, and special interest groups. With your guidance, we are committed to navigating these treacherous waters together in the hope that the second half of 2012 will show robust and sustainable growth again for this industry. To all of our members a very happy, healthy and prosperous New Year!

Quarter 4 (Oct-Dec 2011) Photovoltaic Accomplishments

PV Taiwan 2011Driven by a surge in activity, the scale of PV Taiwan 2011 has grown 30% over the previous year. The exposition, organized by TAITRA in partnership with SEMI, hosted 286 companies who occupied 806 booths. More than 10,000 visitors from 60 countries around the world visited the exposition – a testament to Taiwan's emerging leadership in PV cell production. The international forum attracted about 450 attendees and featured more than 20 PV experts from Motech, Neo Solar, Taiwan Polysilicon, GCL, DelSolar, DuPont, Ferro, OCI, Oerlikon, PASAN, Sanyo and Solarbuzz.

SOLARCON India 2011SOLARCON India was held November 9-11 in Hyderabad. The event featured 114 exhibiting companies and total verified attendance of 3,411. Francisco J. Sánchez, under secretary of Commerce for International Trade, U.S. Department of Commerce, delivered the high-profile inauguration speech. More than 70 speakers drawn from the industry, academia and government presented, focusing on India's roadmap to solar leadership. Dr. Bharat Bhargava, director PV, Ministry of New and Renewable Energy (MNRE), Government of India, Dr. Josef J. Haase, CEO Cell & Module, centrotherm PV and James G. Brown (president, Utility Systems Business Group, First Solar) delivered inaugural keynotes at the conference.

SEMI International Standards Update for Photovoltaics

Solar Panel Shipping Standard: SEMI announced the publication of "SEMI PV23-1011— Test Method for Mechanical Vibration of c-Si Photovoltaic (PV) Modules In Shipping Environment." This new SEMI Standard, which can reduce costs related to damage incurred during the transportation of PV modules, was primarily authored by the SEMI Taiwan PV Standards Committee, and vetted by the global SEMI PV Standards Committee, which consists of over 450 members, representing over 200 companies in every major PV manufacturing region.

SEMICON Japan/PV Japan EHS Regulatory Seminar, "Environmental Regulatory Trend and Case Study," held on December 6 in Tokyo. More than 50 participants attended.

The SEMI RoHS Working Group provided substantial technical comments to the European Commission on proposed new definitions affecting the RoHS Directive.

Congress Funds Agencies Important to PV at or above 2011 LevelsOn December 16, Congress set spending levels for the Department of Energy (DOE) Energy Efficiency and Renewable Energy (EERE) Program, which contains the Solar Technologies program. While the program faced a nearly 30% cut earlier in the year, the year-end spending bill restored the proposed cut and flat funded the program year-to-year. The DOE Office of Science also received a small increase. The DOE Advanced Research Projects Agency–Energy (ARPA-e) received a 53.1% increase over the previous year. Concerned with the original cuts as proposed by the U.S. House of Representatives, in July SEMI sent a letter to leadership of the Appropriations Committee and made our case for increases to these spending levels.

SEMI Industry Research and Statistics

Worldwide Photovoltaic Book-to-Bill: SEMI reported in December that for the quarter ending September 30, 2011, the worldwide photovoltaic manufacturing equipment book-to-bill ratio fell to 0.35, reaching its lowest level since the start of data collection in the first quarter of 2010. Worldwide billings declined 24% from the previous quarter to $1.6 billion. Worldwide bookings, which represent net new orders of PV manufacturing equipment, extended the declining trend started in the first quarter of 2011, tumbling another 70% for the quarter.

Highlights of the fourth quarter in Emerging and Adjacent Markets were the continued strengthening of our platform for LED and Plastics Electronics services. Last quarter saw the establishment of SEMI LED Advisory Committees in India, Korea and China with continued progress in our LED Standards efforts with meetings held in the U.S., Europe, Japan, and China. The first SEMI LED Standard on 6" sapphire wafer specifications was balloted in January and LED factory automation interface standards are fast-tracked for balloting in 2012. In December, SEMI co-organized a 2-day LED Summit in conjunction with SOLARCON India.

SEMI has also strengthened our member services in the printed and organic electronics with the successful completion of the Plastics Electronics Conference, co-located with SEMICON Europa. SEMI also met with the board of the Plastics Electronics Foundation to discuss further strengthening our relationship. SEMICON Europa also held the annual the International MEMS/MST Forum, attended by approximately 200 MEMS/MST technology leaders.

SEMICON Japan proved a valuable forum for emerging markets as the Next Generation Technology Pavilion served over 100 exhibitors and provided technology symposiums on LEDs, MEMS, OLEDs and other technologies.

Quarter 4 (Oct-Dec 2011) Emerging Markets Accomplishments

FPD International 2011FPD International 2011 was held in Yokohama, Japan on October 26-27. Coorganized by Nikkei Business Publications and SEMI, the event featured keynote presentations from NICHIA, Philips Lumileds, LG Electronics Japan, and Sungkyunkwan University. FPD International attracted tens of thousands of attendees and over 170 exhibitors.

Korea LED Manufacturing Technology TutorialThe first LED Manufacturing Technology Tutorial was held in Korea on October 24-26. Focused on manufacturing technology issues and curriculum, the tutorial was organized by the Korea Polytechnic University (KPU) LED Center. The two-day lecture course in COEX was attended by 120 people from the LED industry and academia. It included a "hands on" course delivered to 12 engineers from LED companies.

Two-Day LED Summit in IndiaSEMI co-organized the two-day LED Summit in Hyderabad, India attended by over 200 attendees. The summit focused on SSL (solid state lighting) technology with speakers from LED manufacturers, LED suppliers, researchers and others.

Next Generation Technology Pavilion at SEMICON JapanThe Next Generation Technology Pavilion served over 100 exhibitors at SEMICON Japan. Associated technology symposiums were held for MEMs, LEDs, and OLEDs.

2011 China Display/Asia Display Conference 2011Attracting over 800 attendees, the 2011 China Display/Asia Display Conference was held in Kunshan, Jiangsu Province on November 6-9. The conference was hosted by the Society for Information Display (SID) and the Kunshan government, with SEMI China supporting the event as a primary co-organizer. The conference featured 226 speakers with an agenda that included four tutorials, two plenary talks, 10 themed sessions, two poster sessions, a technology showcase, and more.

SEMI LED Advisory Committee Established in India, China and KoreaSEMI LED Advisory Committees were established in India, China and Korea and included major LED manufacturers including Cree, Philips, Samsung, LG Innotek, and Seoul Semiconductor.

SEMI China LED Committee Established on December 12 in ShanghaiSEMI China announced the establishment of its China LED Committee and held the first meeting. The Committee consists of several enterprises in LED manufacture industrial chain, including global sapphire substrate manufacture, MOCVD process, HB LED manufacture and suppliers of key equipment and raw materials. The first president and vice-president of the Committee are Tang Guoqing, head of CREE China and Dr. Xiao Guowei, managing director of APT Electronics Ltd.

SEMI International Standards for Emerging Markets

Display Standard: SEMI and ITRI jointly announced the publication of "SEMI D65— Measurement Method for the Color Breakup of Field Sequential Color Display" on December 12. The new standard is the world's first measurement Standard for the color breakup (CBU) of Field Sequential Color Displays. It was initiated by the SEMI Standards CBU Taskforce led by AUO, Chroma, CPT, ITRI and NCTU. The new standard proposes a list of measurement methods for the degree of CBU in the field sequential display. The standard will help the industry players to lower the cost in both production and communication.

High-Brightness LEDs: Over 300 attendees made valuable contacts and learned about the latest developments in organic and printed electronics at the Plastics Electronics Conference, co-located with SEMICON Europa.

LED Factory Automation and Wafer Standards: HB-LED Factory Automation and Wafer standards progressed with standards meetings in Japan, Europe and North America. Standards overview meetings were also held in China.

EHS Update for Emerging MarketsSEMI RoHS Working Group provided feedback, including substantial technical comments, to the European Commission on how proposed new definitions affect the RoHS Directive.

For links and a full list of events, click here.
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